A fermentation of ideas

Rui Falcão and Paulo Salvador, founders

When television personality were asked by the city council of Cascais, near Lisbon, to create a food event, they came up with a better idea – a wine conference that would bring some of the liveliest minds in the wine world together to encourage cross-disciplinary dialogue.

“We truly believe there are a lot of excellent events on wine, but most are focused on one specific side of the wine industry – wine tourism, or winemaking, or marketing,” explains Falcão. “There are not a lot of events that talk about wine under the whole umbrella and that’s what we wanted to do.” He goes on to say that the pair wanted to create something future-focused. “What are our major concerns, what are the major problems? That’s the reason for the name being “MUST ― Fermenting Ideas”, because we want to discuss what’s concerning us.” He says that the aim is to give each presentation a workshop feel, with plenty of time for discussion.

The first conference was held in 2017. Here are some highlights from the 2018 conference.

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A look at South-East Asia
Hong Kong-based Debra Meiburg MW is one of the key wine figures in South-East Asia. A broadcaster, wine judge, educator, chooser of airline wines and publisher, she took the audience on a lightning fast 40-minute ride through the main markets of Asia. First, she said, “there is no clear boundary of what is and is not Asia. Where we draw the line is Pakistan – they are not considered Asia by the Asians.”

South Korea, she says, has a high potential, though it’s at an early market stage: “Korea has become the trendsetter of Asia” thanks to its popular soap operas and pop bands, and its young and trendy population. She does, however, say it can be tough to break into the market, because it’s “controlled by a few families. It’s not exactly mafia, but you can think of it like mafia – they control integrated industries all the way to supermarkets.”

Singapore, on the other hand, is a market that too many producers overlook. “Singapore has the highest percentage of wine sold into Asian restaurants,” she says, adding that the population is a mix of Indians, Malays, Chinese and expats, giving it a lively culture. Singapore also acts as a wine hub, with about 68% of Singapore importers exporting to other countries in the region.

Likewise, few companies make an effort to penetrate the Taiwanese market. “I love this market,” she says. “It is small, but it is not a ‘miniature China’ market. It’s quite different.” Advantages include a fair rate of tax and low levels of counterfeiting. And about 95% of food and beverage outlets allow you to bring your own bottle, she says. Not only that, but if you want a particular wine, the restaurant will call the importer and get the wine sent directly to the restaurant. “As a result, there are only two sommeliers in Taiwan, and they’re with French outlets. They have zero buying power and influence.”

China, of course, is the market that everyone is most interested in and Meiburg had plenty of advice about how to approach it. “Talking about China is like talking about Europe and a half. There are 33 provinces to think about; the key provinces are importing 95% of the market. There are eight that dominate the market.”

Whether China should be considered a mature or immature market depends on individual cities. “Some of the most sophisticated drinkers in the world are in China, but they mainly know Bordeaux and the rest of the world is a mystery to them – and they refuse to shift.” Red wine still dominates, sparkling wine struggles, and “rosé doesn’t exist”. Meiburg says Chinese consumers are not yet at the stage where they want to discover boutique wines, with the prevailing view being “if it’s good, why isn’t it big?”

E-commerce is far more sophisticated than elsewhere. “This market changes so fast that I’m scared to present on e-commerce – in two months, anything can happen,” she says. There are some constants, however, including the two festival periods of 18 June and 11 November, when sales activity becomes extreme, and in one instance “ten thousand mobile phones were sold in five seconds”.

There are some classic mistakes for Westerners to avoid. “Don’t count on the press to move the market,” Meiburg advises. Although it’s “good to get them on side, very few people buy because of the press”. Winemaker visits are key, as is bringing influential people back to the wine region. “When working with an importer, find out their brand building experience. What experience do they have with mid-market brands?” She notes that importers used to working with Bordeaux haven’t had to build brands. Finally, if you are selling a prestige wine, be aware that there is a hot secondary market for empty bottles, which sell for about $25.00 each, “due to our counterfeit culture”.

Fraud patrol
Maureen Downey has heard every possible iteration of the empty bottle scam. The founder of Chai Consulting, Downey is one of the world’s best-known wine detectives, specialising in authentication. “Ebay remains a huge problem,” she says. “They sell empty bottles.”
Downey made it clear that wine fraud is a multi-faceted problem. “People think of counterfeit wine, but that’s just one aspect.” What all forms of wine fraud have in common, whether they’re sales of stolen wines, insurance fraud, or the sale of damaged wine collections, is that they all “involve misrepresentation of goods”. Unfortunately, she says, law enforcement does not take wine crime seriously. “One of the reasons I believe people don’t take it seriously is because people don’t die of it,” she says.

As to why it’s on the rise, Downey points the finger at globalisation, because it has dissolved the traditional relationship between buyer and seller, where merchants and customers built up trust over time. “You have no relationship with the merchant and he has no duty to you,” she says. “We’ve shifted from the merchant as educator to the internet as educator,” she says, adding that the computer age has made it easy to create counterfeits. Counterfeiters now find it easy to refill bottles, recreate bottles and even create wines that Downey calls “unicorns – it doesn’t mean a wine that’s rare, it means a wine that’s mythical”.

She also says it’s not so much spotting counterfeits that’s the problem, as tracking them all down. Well-known counterfeiters like Rudy Kurniawan were prolific, and their creations weren’t all destroyed – many went back into circulation, as buyers and vendors became desperate to recoup their losses. “Every crook needs an enabler. They need vendors. They need outlets,” she says, visibly frustrated that more isn’t being done to stop the trade in illicit wine. “Wine fraud is not a victimless crime. It affects everyone. When one vendor is not licensed, he is unfairly competing against everybody else. We have millions of dollars of unpaid taxes. We have corporations spending a lot of time and energy protecting their brands.”

On the road
One of MUST’s most charismatic speakers was CEO of South Africa’s Destinate tourism marketing agency. “Wine tourism is on the rise globally and people realise that the wine they’re drinking comes from amazing places,” she says. “Wine tourism is the key to unlock the warm heart of the regions.” But wine tourism is a complicated industry, partly because people don’t always work together or focus on outcomes. “What are we trying to change? Change behaviour? Sell more wine? Get more visitors?” Whatever the strategy, she warns against marketing that “gives us goosebumps” but “ultimately has no impact”.

Du Toit-Helmbold emphasised that wine tourism is a “good business,” with wine tourists spending more than visitors in other tourism categories. “The real value lies within the value chain. On average, there are 10 businesses affected per average winery – the woman baking bread for the guesthouse, the man driving the visitors.”

Globally, she says, the number of specialist wine tourism operators is growing. “What are the trends telling us? Our world is a fractured place. People are tired and stressed and afraid.” The global shift in power from West to East “has opened up new markets and we have to change the way we talk to people”. Significantly, the definition of luxury is also changing. “Immersive travel is the new luxury. Luxury is no longer being driven around in a luxury car – true luxury for many people is having programs designed around their personal needs and interests. It’s going places and meeting people that you won’t meet if you go for a mass market product.”

In terms of marketing, du Toit-Helmbold says her company does a lot of influencer marketing, but chooses not to focus on big stars. “Some people think Drew Barrymore will sell their wine. What we have seen is a new breed of influencer – the micro influencer. The truly trusted friend who people follow because they trust them. If they give a bad review, they will tarnish the brand.” Ordinary people have something that big stars don’t have: trust. “Trust is the one thing that money cannot buy and it’s the most valuable commodity in wine and travel.”

Finally, she said, there is one core truth about wine tourism: “You cannot put tourism together and expect people to have a great time if your wine is average.” Good wine is the key.

What’s next
In the two years since MUST – Fermenting Ideas began, it’s attracted a star-studded line-up – last year it included Eric Asimov, Matthew Jukes and Alice Feiring, while this year’s line-up included Professor Charles Spence of the University of Oxford and Heini Zachariassen, founder of Vivino. In the future, Falcão suggests, he wants to attract hard-hitting speakers from other industries, such as fashion.

Salvador’s and Falcão’s efforts may not yet be filling Cascais’s impressive convention centre but the quality of the attendees was high, with many having travelled across the world. The support of the Portuguese establishment was also clear from the enthusiastic participation of Turismo de Portugal and the ongoing commitment of the mayor of Cascais. The wine industry certainly needs a forum and this could be it. Felicity Carter